Encore Capital Group Reports 18.6% Revenue Growth in Q3 2024, Net Income Up 58.5%

Encore Capital Group, Inc. reported significant financial growth in its third quarter and year-to-date results for 2024, driven by increased revenues from its receivable portfolios and strategic acquisitions. For the three months ended September 30, 2024, total revenues reached $367.1 million, an 18.6% increase from $309.6 million in the same period of 2023. Year-to-date revenues also rose to $1.05 billion, up 11.2% from $945.3 million in the prior year.

Revenue from receivable portfolios for Q3 2024 was $328.1 million, compared to $302.7 million in Q3 2023, while total debt purchasing revenue increased to $340.8 million from $285.6 million. The growth in revenue was attributed to a higher volume of portfolio purchases and favorable market conditions, particularly in the U.S., where revenue rose to $258.3 million from $201.6 million year-over-year.

Net income for Q3 2024 was $30.6 million, a substantial increase from $19.3 million in Q3 2023. For the nine months ended September 30, 2024, net income totaled $86.1 million, compared to $64.3 million in the same period of 2023. Basic earnings per share for Q3 2024 were $1.28, up from $0.82 in Q3 2023, while diluted earnings per share increased to $1.26 from $0.79.

The company’s total assets as of September 30, 2024, were $4.99 billion, up from $4.63 billion at the end of 2023. Cash and cash equivalents also saw a significant increase, totaling $247.4 million compared to $158.4 million at the end of 2023. The investment in receivable portfolios rose to $3.72 billion from $3.47 billion, reflecting the company’s ongoing strategy to acquire and manage defaulted consumer receivables.

Operating expenses for Q3 2024 were $261.0 million, up from $234.1 million in Q3 2023, primarily due to increased salaries and employee benefits associated with a growing workforce. The company also experienced a rise in legal collection costs, although this was partially offset by a decrease in contingent fees paid to external attorneys.

Strategically, Encore Capital Group has focused on expanding its operations in the U.S. and U.K. markets while managing its portfolio acquisitions effectively. The company has entered into forward flow purchase agreements for nonperforming loans with an estimated minimum aggregate purchase price of approximately $466.1 million. Additionally, the company has a share repurchase program authorized for $300 million, with $91.9 million remaining as of September 30, 2024.

Overall, Encore Capital Group's performance in Q3 2024 reflects a robust recovery and growth trajectory, supported by strategic acquisitions and effective management of its receivable portfolios.